Mental Budgeting and Consumer Decisions

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ID: 306306
1996
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Abstract
Consumers often set budgets for categories of expenses (e.g., entertainment) and track expenses against their budget. Because budgets cannot perfectly anticipate consumption opportunities, people may earmark too much or too little money for a particular category. This leads them to overconsume or underconsume goods in that category. The results of three studies suggest that consumers do indeed set budgets and that budgeting may lead to underconsumption. To show that consumers track expenses, the studies demonstrate that budgeting effects are larger for purchases that are highly typical of their category. Such purchases reduce the amount people spend in a category and block the purchase of other typical items. The studies control for satiation and income effects; thus, budgeting adds predictive power to standard economic consumer theory.
Reference Key
openalex_W2023096695 Use this key to autocite in the manuscript while using SciMatic Manuscript Manager or Thesis Manager
Authors Chip Heath, Jack B. Soll
Journal journal of consumer research
Year 1996
DOI
10.1086/209465
URL
https://doi.org/10.1086/209465
Keywords Keywords not found

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